A Seminar Report On RURAL MARKETING Submitted in the partial fulfillment of the award of PG Degree of Master of Business Administration Session

2008-09 Submitted To: Submitted By: Department of Management Studies, Ravi MBA 4th sem. (Marketing) Jaipur

Executive Summary A debate continued for a long time amongst the Indian marketers, both practition ers & academicians, on the justification for the existence of the distinct discipline of rural marketing. Consequently, two schools of thought emerged. The first school belived that the products/services, marketing tools & strategies that are successful in urban are as, could be transplanted with little or no more modifications in rural areas. However, the s econd school saw a clear distinction between urban & rural India, & suggested a different approac h, skills, tools & strategies to be successful in rural markets. What differentiates the two markets is not mere income, but a host of other infr astructural & socio-cultural factors. Thus, the rural market cannot be tapped successfully wit h an urban marketing mindset & would definitely require its thorough understanding. In othe r words, the approach toward rural markets needs to be distinct from the one adopted for the urban markets. Thus, in a large rural economy like India s, rural marketing has emerged as an imp ortant & distinct internal sub-division within the marketing discipline. This sub-divisio n clearly highlights the differences between rural marketing & mainstream marketing.

Table of contents 1) Rural marketing 3 2) Evolution of rural marketing 4 3) Nature of rural market 8 4) Rural marketing transactional or developmental 9 5) Classification of rural consumers 11 6) Roadblocks of Indian Rural Markets 12 7) Attractiveness of rural market 14 8) Rural Vs Urban Marketing 19 9) Rural consumer behavior 22 10) 4 A s approach of Indian Rural Market 25 11) Rural marketing Mix 28 12) Marketing strategies to capture rural market 37 12.1.Product strategies 42 12.2.Pricing strategies 44 12.3.Promotion strategies 45 12.4.Distribution strategies 46 13) Media vehicles 53 13.1.Formal media 54 13.2.Informal/rural specific media 57 13.3.Choosing media vehicles 64 14) Conclusion 65 15) References 66

These includ e: Pesticides. 2. pricing. fruits and vegeta bles. A n agent or a middleman plays a crucial role in the marketing process. Consumer durables. promoting. The following are some of the important items sold from the rural to urban areas: seeds. milk and related products. Rural to Urban: Transactions in this category basically fall under agricultural marketing where a rural producer seeks to sell his produce in an urban market. FMCG Products. Rural to Rural: This includes the activities that take place between two village s in close proximity to each other. forest produce. spices.Rural Marketing Rural marketing involves the process of developing. URBAN RURAL RURAL URBAN RURAL RURAL It is a two-way marketing process wherein the transactions can be: 1. distribu ting rural specific product and a service leading to exchange between rural and urban marke t which satisfies consumer demand and also achieves organizational objectives. etc. The transactions relate to the areas of expertise the particular village has. cattle. It inv olves the selling of products and services by urban marketers in rural areas. etc. These include selling of agricultural tools. . 3. Urban to Rural: A major part of rural marketing falls into this category. car ts and others to another village in its proximity.

besides being titled towards profit. opinion makers. The rural areas are c onsuming a large number of industrial and urban manufactured products. as the proce ss of rural marketing involves an urban to rural activity. Most of the jobs of marketing and selling are left to the local dea lers and retailers. modalities. Rura l marketing basically deals with delivering manufactured or processed inputs or services to rural producers. money and labour. This has designed a new way for understanding a new process called Rural Marketing. Rural marketing in India is not much developed there are many hindrances in the area of market. products. Rural marketing is different from agricultural marketing. Rural market ing differs from agricultural or consumer products marketing in terms of the nature of transactio ns. which in turn is characterised by various peculiarities in terms of nature of market. consumer g oods. norms and outcomes. dealer s. The market for input gets interlocked with other markets like output. One has to have a stra tegic view of the rural markets so as to know and understand the markets well. Indian agricultu ral industry has been growing at a tremendous pace in the last few decades. The participant s in case of Rural Marketing would also be different they include input manufacturers. The rural agricultur al production and consumption process plays a predominant role in developing the Indian econom y. pricing. farmers. distribution and promotion. Com panies need to understand rural marketing in a broader manner not only to survive and grow in t heir business. Rural marketing needs to combine concerns for profit with a concern for the soci ety. but also a means to the development of the rural economy. government agencies and traders. In the context of rural marketing one has to understand the manipulation of marketing mix has to be prop erly . Marketing is the process of identifying and satisfying customers needs and providing them with adequate after sales service.Rural marketing requires the understanding of the complexities. the demand for which is basically a derived outcome. Rural marketing scientists also term it as developmental marketing. w hich signifies marketing of rural products to the urban consumer or institutional markets. which includes participants. product design and positioning. Rural market for agricultural inputs is a case of m arket pull and not market push. products and processes. The concept of rural marketing has to be distinguished from Agricultural marketi ng.

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Nineties Consumables (Post-Rural And Urban & Rural liberalization Marketing Durables For Rural period on 20th Consumption century) & Production IV 21st century Developmental All products & Urban & Urban & marketing services Rural Rural 1. Evolution of Rural Marketing PHASE ORIGIN FUNCTION MAJOR PRODUCTS SOURCE MARKET DESTINATION MARKET I Before Mid1960 (from independence Agricultural Marketing Agricultural Produce Rural Urban to green revolution) II Mid. Phase I ( from Independence to Green Revolution): .Sixties (Green Marketing Of Agricultural Urban Rural revolution to Agricultural Inputs Pre-Inputs liberalization period) III Mid. Product usage is central to price. branding.understood in terms of product usage. thus any strategy i n rural marketing should be given due attention and importance by understanding the prod uct usage. all elements of marketing mix can be better organised and managed. company image and more important farmer economics. distrib ution. promotion.

but by presenting comprehensive & integrated solutions which might involve a set of interrelated products & services. 2. social mobility. Rural marketing then referred to the marketing of rural products in r ural & urban products. Phase II (Green Revolution to Pre-liberalization period): During these times. Phase III (Post-liberalization period on 20th century): The third phase of rural marketing started after the liberalization of the India n economy. rural marketing represented the emerging. And. 3. the focus of marketers in India was the urban consumer and by lar ge number specific efforts were made to reach the rural markets. if an organization wants to tap the real potential of the rural market. In this period. 4. because of scientific agriculture. due to the advent & spread of the Green Revolution. Its approach & strategies must not focus in just selling products & services. improved means of transportations and communicati on and other penetrations of mass media such as television and its various satellite channels have exposed rural India to the outside world and hence their outlook to life has also change d. peoples & their occupations. not through atand-alone produc ts or services. rural India in now attracting more and more marketers. bu t they should also aim at creating an environment for this to happen. The objective of rural marketing in the current phase is the improvement of the quality of life by satisfying the needs & wants of the customers. the corpor ate world has finally realized the quick-fix solutions & piecemeal approaches will d eliver only limited results in the rural markets. coupled with increase in purchasing pow er. Phase IV (21st century): Learning from its rural marketing experiences after the independence.Before the advent of the Green revolution. distinct activity of a ttracting & serving rural markets to fulfill the need & wants of rural households. it needs to make a long-term commitment with this market. rural ma rketing represented marketing of agriculture inputs in rural markets & marketing of rura l produce in urban areas. . the nature of rural market was altoge ther different. the changing life style and consumption pattern of villa gers with increase in education. Because of all these factors. Till recently. But now it is felt that w ith the tempo of development accelerating in rural India.

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carrying out after sales service that leads to customer satisfacti on and repeat purchase/sales. Rural Marketing broadly involves re aching the rural customer. According to a recent survey conducted by the National Council for Applied Econo mic Research (NCAER). Thus. Indian rural markets have caught the attention of many companies. There may be less number of shops available to market products. the purchasing power of the rural people has increased due to increase in productivity and better price commanded by the agricultural products.Increase in competition. the income of the rural masses is directly affected. Coming to the frame work of Rural Marketing. Rural marketing has become the latest mantra of most corporate. supply of goods and service s to meet their requirements. L. made the companies to think about new potential markets. Nature of Rural Market . . In the event of a crop failure. . Coca Cola. Colgate Palmolive. and scatter ed into a number of regions. By and lar ge this rise in purchasing power remains unexploited and with the growing reach of the televisio n. more and move new products dem anding urban customers. Standard of Living and rising disposable income of the rural customers: It is known that majority of the rural population lives below poverty line and has low . Philips. advertisers and multination al companies. saturated urban markets. Britannia and even Multinational Companies (MNCs) like Pepsi. Large. Diverse and Scattered Market: Rural market in India is large. Cavin Kare are all eyeing rural markets to capture the large Indian market..G. it is now quite easy for the marketers to capture these markets. understanding their needs and wants. Companies like H industan Lever. Major Income of Rural consumers is from Agriculture: Rural Prosperity is tied wi th agriculture prosperity.

. communication system. whi ch ultimately affects the rural market. rural people have disparate socioeconomic background. rural markets have become an attractive proposition for commercial b usiness organizations. Infrastructure Facilities: The infrastructure facilities like cemented roads. This is grad ually changing due to literacy especially in the youth who have begun to change the ou tlook in the villages. government regulation on pricing has created disposable incomes. societal backwardness. low per capital income. wa rehouses. . . Diverse socioeconomic background: Due to dispersion of geographical areas and uneven land fertility. etc. The role of rural marketing as such is more developmental than transactional. Cha nge is a continuous process but most rural people accept change gradually. Today the rural customer spends money to get value and is aw are of the happening around him. Rising literacy levels: It is documented that approximately 45% of rural Indians are literate. Hence awareness has increases and the farmers are well-informed about the world around them. . good monsoon. and financial facilities are inadequate in rural areas. low savings. They are also educating themselves on the new technology arou nd them and aspiring for a better lifestyle. Traditional Outlook: Villages develop slowly and have a traditional outlook.literacy rate. . Is rural marketing transactional or developmental in its approach? It is true. But the new tax structure. It is more a process of delivering better standard of living and quality of life to the rural environment taking into consideration the prevailing village milieu. He nce physical distribution is a challenge to marketers who have found innovative ways to market their products.

corporate enterprises. · Rural marketing process is both a catalyst as well as an outcome of the general rural development process. Initiation and management of social and economic change in the . Table brings out the differen ces in brief. Sellers Government. Target group Buyers Beneficiaries and buyers 9. voluntary agencies.Transactional Vs Developmental: For better comprehension of this role let us dis tinguish development marketing and transactional marketing. economic 6. Transactional Vs Development Marketing S. Concept Consumer orientation. Role Stimulating and conversional marketing Catalytic and transformation agent 3. Focus Product-market fit Social change 4. benefactors 7. Marketing concept Society orientation. Goal Profits Customer satisfaction Brand image Market development Corporate Image 11. Communication Functional Developmental 10. Motivation Profit-motive Business policy Service-motive Ideological or Public policy Model: The model of rural marketing represents a combination of the transactiona l and developmental approaches. Key task Product innovations and communications Social innovations and communications 5. Participants Corporate enterprises. Nature of activity Commercial Socio-cultural. Time-Frame Short-medium Medium-Long 12.No. Offer Products and services Development projects/schemes/programs 8. societal concept 2. Aspect Transactional Development 1.

They ha ve affordability but not form a demand base large enough for marketing firms to dep end on. The process of transformation can be only evolutionary and not revolutionary. Classification of rural consumers The rural consumers are classified into the following groups based on their econ omic status: The Affluent Group: They are cash rich farmers and a very few in number. Wheat farmers in Punjab and rice merchants of Andhra Pradesh fall in this gr oup. encourage cooperation and strengthen competitive spirit during intera ctions between rural and urban as well as within rural areas. It becomes in this proc ess both benefactor and beneficiary. . Innovative methods of social change for successful transformation of traditional society are virtual. The exposure of ruralites to a variety of marketing transactions during the chan ge process puts them in the role of beneficiaries than of just `buyers' of modern i nputs and infrastructural services. Another critical point fo r communication is the point of conversion of ruralite from an "induced beneficiar y" to an "autonomous buyer". Farmers cultivating sugar cane in UP and Karnataka fall in this category. Such a change narr ows the rural-urban divide. It should serve to resolv e social conflicts. Communication is the vital element of rural marketing. Th e growth of the rural market can be a planned evolutionary process based on strate gic instruments of change rather than constitute just short-term opportunities for commercial gains. The Middle Class: This is one of the largest segments for manufactured goods and is fast expanding.rural sector is the core of the rural marketing process. Innovation is the essence of marketing.

Low literacy levels: The low literacy levels in rural areas leads to a problem o f communication. 1. proper and effective deployment of sales force and effective marketing communication when t hey enter rural markets. Low per capita income: Agriculture is the main source of income and hence spendi ng capacity depends upon the agriculture produce. Transportation and warehousing: Transportation is one of the biggest challenges in rural markets. Many villages are l ocated in hilly terrains that make it difficult to connect them through roads. Ineffective distribution channels: The distribution chain is not very well organ ized and requires a large number of intermediaries. 3.The Poor: This constitutes a huge segment. The farmers of Bihar and Orissa fa ll under this category. which in turn increases the cost and . The major problems are listed below. Purchasing power is less. Demand may not be stable or regul ar. 4. logistic s. Roadblocks of Indian Rural Markets There are several roadblocks that make it difficult to progress in the rural mar ket. However. Thus the market is also underdeveloped and marketing strategies have to be different from those used in urban marketing. Standard of living: The number of people below the poverty line is more in rural markets. The services rendered by central warehousing corporatio n and state warehousing corporations are limited only to urban and suburban areas. 2. as there is hardly any organized agency to look after the storage issue. Marketers encounter a number of problems like dealing with physical distribution. They receive the grants from government and reap the benefits of many s uch schemes and may move towards the middleclass. As far as road transportation is concerned. but strengt h is more. 5. about 50% of Indian v illages are connected by roads. Print media has less utility compared to the other media of communication. Warehousi ng is another major problem in rural areas. the rest of the rural markets do not even have a proper road linkage which makes physical distribution a tough task. Most mar keters use tractors or bullock carts in rural areas to distribute their products.

diffe rent behaviour and language of the respective areas make it difficult to handle the c ustomers. Dispersed markets: Rural population is highly dispersed and requires a lot of marketing efforts in terms of distribution and communication. Harvest season might see an increase in disposable income and hence more purchas ing power. A lot of spurious brands or look-alikes are available. Many languages and diversity in culture: Factors like cultural congruence. manufactu rers are reluctant to open outlets in these areas. which may be a problem for effective communication. 10. Many a time the rural customer may not be aware of the difference due to illiteracy. Traits among the sales force are required to match the various requirements of t hese specific areas. who are not easily available for rural areas.creates administrative problems. 9. They are mainly dependent on dealers. The l iteracy rate in the rural areas is rather low and consumer s behaviour in these areas is traditional. Due to lack of proper infrastructure. but it continues to be a far cry in rural areas due to lack of communication facilities like telegraph and telecommunication systems etc. Lack of communication system: Quick communication is the need of the hour for smooth conduct of business. This is a challenge to the marketers. 8. 6. Seasonal demand: Demand may be seasonal due to dependency on agricultural income . Spurious brands: Cost is an important factor that determines purchasing decision in rural areas. providing a low cost option to the rural customer. Attractiveness of rural market . 7.

the rural areas continue to be the place of living ma jority of Indians. Large Population: The rural population is large and its growth rate is also high . Despite the rural urban migration. 2.1 2 3 4 5 6 7 8 Large population Rising prosperity Growth in consumption Life cycle changes Life cycle advantages Market growth rate higher than urban Rural marketing is not expensive Remoteness is no longer a problem 1. Rising Rural Propensity: .

000 will incr ease from 34.52 95. % TOTAL NO.7 .73 6 4.04 7.000 2. 25.9 0.0% in 2006-07.4 37.000.000 & BELOW 61.1 44.12 23.09 8 3. which roughly translates into 1. 382/-) 3 Assam 338 Madhya Pradesh 326 Bihar 289 Distribution household s income wise (projection in Rs Crore) INCOME GROUPS 2001 02 2006 07 RURAL RURAL TOTAL NO.000 8.1 MIDDLE 12.8 5.0 22. The rural consuming class is increasi ng by about 3-4% per annum.0 41.2 16.001-100. 382/-) 5 West Bengal 382 Orissa 381 Tamil Naidu 381 Uttar Pradesh 373 Karnataka 365 Low (Below Rs.68 3.8 LOW 5. 100.8 RS.4 RS.2 Thus we see that population between income level of Rs.4 20.) LEVEL NO. Growth in consumption: PER CAPITA HOUSEHOLD EXPENDITURE (IS RS.001-50.000 1. 77.7 5.000 26.25. STATES EXPENDITURE High (Above Rs 382/-) 7 Punjab 614 Kerala 604 Haryana 546 Rajasthan 452 Gujarat 416 Andhra Pradesh 386 Maharastra 384 Average (Rs.3 13.2 million new consumers ye arly.52 0. 3.7 4.6 RS.72 10. 50.6 3.77.3% in 1994-95 to 67.001-77. 25.INCOME GROUP 1994-95 2000-01 2006-07 ABOVE RS.26 0.6 RS.07 2 6.3 2 61.7 5. % HIGH 0.

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Life style changes: Income vs. 4. milk & vegetables are Rs.) ITEM % RICH POOR AVERAGE FOOD ARTICLES 4 4 147 73 95 TOILETRIES 2 0 67 33 43 WASHING MATERIAL 1 3 43 22 28 COSMETICS 1 0 33 17 21 OTC PRODUCTS 4 13 6 9 OTHERS 9 30 15 19 TOTAL 333 166 215 Average rural household spends on consumables excluding food grains.4 20.90 13.7 TOTAL 18.8 9 7 1. usage of packed consumer goods (% of household using) . 215/-.8.04 12.7 Spending pattern (Rural Household s in Rs.9 6 66.

cooking medium (vanaspati). which can reach millions. new research indicate s that the selling in Rural India is not expensive. This includes the expenses o f advertising in vernacular newspapers. reaching them is costly. . body talcum powder.GOODS MONTHLY HOUSEHOLD INCOME (RS. However. Campaign like this . The rural market share will be more than 50% for the products like toilet soaps. 7. costs twice as much in urban area. Remoteness is no longer a problem: Remoteness in a problem but not insurmountabl e. Market growth rates higher: Growth rates of the FMCG market and the durable market are higher in rural areas for many products. 8.) UP TO 350 351 750 751 1500 1501 + WASHING CAKES/BARS 60 78 86 91 TOILET SOAPS 57 72 89 93 TOOTH PASTE/POWDER 22 36 65 85 TALCUM POWDER 20 25 41 63 TEA (PACKAGED) 22 30 48 64 5. van operations and merchandising and point of purchase promotion. Rural marketing is not expensive: Conventional wisdom dictates that since rural consumers are dispersed.1 Growth Talcum powder Maturity 4 Growth 6. r adio.1 Crore to promote a consumer durable inside a state. According to one research it costs roug hly Rs. television spots. tea. cigarettes and hair oil. in-cinema advertising. Life cycle advantage: STAGES IN LIFE CYCLE PRODUCT URBAN MARKET GROWTH RATE % RURAL Popular soaps Maturity 2 Growth Premium soaps Late growth 11 Early growth Washing powder Late growth 6 Early growth Skin creams Maturity 1. cooking medium (oil). The rural distribution is not much developed for the reasons.

Their near obsession with just duplicat ing the urban-type network and that too with very limited success.. Lack of marketer s imagination and initiative. Lack of proper infrastructure such as all-weather roads. has kept them blind t o the potential of these two outlets. RURAL VS URBAN MARKETING-SUMMARY NO. Development Marketing & Relationship Marketing 2 A) MARKET . ASPECT URBAN RURAL 1 PHILOSOPHY Marketing & Societal Concepts & Relationship Marketing Marketing & Societal Concepts. Marketers have so far. electrification and sanitation. failed in analyzing the rural side and exploiting rural I ndia s traditional selling system-Haats & Melas. and .

supermarket. More languages PERSONAL SELLING Door-to-door. & authorised showrooms Village shops. outdoors. stockists. specialty stores. Variation NEEDS High Level Low Level INNOVATION/ADOPTION Faster Slow 3 PRODUCT AWARENESS High Low CONCEPT Known Less Known POSITIONING Easy Difficult USAGE METHOD Easily Grasped Difficult To Grasp QUALITY PREFERENCE Good Moderate 4 PRICE SENSITIVE Yes Very much LEVEL DESIRED Medium-high Medium-low 5 DISTRIBUTION CHANNELS Wholesalers. Even Seasonal. frequently Occasionally SALES PROMOTION Contests. audio visual media. print media to some extent. retailer. price discount Gifts. few languages TV. exhibitions etc. price discounts PUBLICITY Good opportunities Less opportunities Special Products for Rural Markets: . Haats TRANSPORT FACILITIES Good Average PRODUCT AVAILABILITY High Limited 6 PROMOTION ADVERTISING Print. gifts. radio.B) DEMAND High Low C) COMPETITION Among Units In Organized Sector Mostly From Unorganized Units CONSUMERS LOCATION Concentrated Widely Spread LITERACY High Low INCOME High Low EXPENDITURE Planned.

spur ious. The product at 20-25 HP will be targeted at those who cannot afford a n ormal tractor and would also fulfill the need of family transporter that could take in the rural roughs but would be much more comfortable and safer than the conventional tracto r-trolley. It was also found that a rural consumer looks for the ruggedness of the watch more than the urban consumer does . rural consumers unf amiliar with English would still be able to use the TV without being intimidated. a poor imitator may even produce an improved version of the original product. Tamil and Bengali. The advantages that these products enjoy in the rural markets are that the Imita tors who are in the villages are making these and they are offering More Margins & Better credit Facilities. and competence of imitator. The logic. It spent Rs. To solve this problem the Marketer has to educate the consumer about his product and show him the benefits of his products over the imitated ones. 21 Lacs to develop a set that would have on-screen displays in the vernacular languages of Hindi. He prefers thick watches than slim watches. A poor imitator will end up in producing deceptive. Sampoorna TV: LG Electronics. In this scenario the job of the Marketer becomes even more difficult in the sens e that he has not to fight other competitors but also the imitated products. He dupes the gullible customer by offering products having clo se resemblance with the original. commitme nt. Need-Product Relationships and the changes happening in Rural India Needs Old Products New Products . the Korean firm has rejigged the TV to appeal to l ocal needs. In quality. copycat products. The biggest problem that the Marketers are facing in the Rural Markets is Of IMI TATIONS. On the other hand.Rural Transporter: Mahindra & Mahindra is busy developing the prototype of what it calls a Rural Transporter basically a hybrid between a tractor and a rural transpo rt vehicle. it is poor cousin to the original. fake. Titan Watches: A recent NCAER study revealed that there is a great potential for watches in rural areas. Imitations may result in two types of goods depending upon the purpose. In fact it is considered to be a high priority list.

Horses. Husk Toothpaste. Charcoal. Water lifters. LCVs. Rocksalt. Power Generators. soaps and liquids Transport Bullock Cart. Brick Powder. Mopeds. Canals. Pump Sets Hair Wash Shikakai powder.Brushing Teeth Neem sticks. tooth powder Washing Vessels Coconut fiber. Motors. Earthy materials. Retha. Donkeys Tractors. Ash Washing Powders. Scooters. Motor cycles Irrigation Wells. Besan Shampoos and hair care soaps . Wind Mills Bore-wells.

000 villages in the country as against about 300 cities and 4600 towns. in different parts of India. Factors influencing buying behavior The various factors that affect buying behavior of in rural India are: 1. sizes. Geographic influences -The geographic location in which the rural consumer is located also speaks about the thought process of the consumer. All of these fin al consumers combined make up the consumer market. Consumers in this huge segment have displayed vast differences in their p urchase decisions and the product use. so that marketers can reach this huge untapped segment. Family it is an important buying decision making organization in consumer markets. within which the consumer lives. For instance. Villagers react differently to different products . egs . Electrification. The consumer market in this case is Rural India. 2. vil lages in South India accept technology quicker than in other parts of India. There are more than 600. it is important to study the thought process that goes into making a purch ase decision. Thus. About 70% of India s population l ives in rural areas. water supply affects demand for durables. Industry observers are increasingly realizi ng that at times. Thus utmost care in terms of understanding con sumer psyche needs to be taken while marketing products to rural India. colours. Family size & the roles played by family members exercise considerable influence on the purchase decisions. but has more to d o . etc. Thus. HMT sells more winding watches in the north while they sell more quartz watches down south.Rural Consumer Behaviour Consumer Buyer Behaviour refers to the buying behaviour of final consumers -indi viduals and households who buy goods and services for personal consumption. 3. purchase of durable has less to do with income. Environmental of the consumer -The environment or the surroundings. has a very strong influence on the buyer behavior.

agriculture is the primary occupation. Washing machine being used for churning lassi. the Tata Sumo. Culture is the most ba sic element that shapes a person s wants and behaviour. which only goes on to make the m arketer s job tougher. Product (colour. The study of product end provides indicators to the company on the need for education and also for new product ideas. For example. and shape): There are many examples that support this point. 6. But however. Creative use of product ex Godrej hair dye being used as a paint to colour horns of oxen. 4. design. becomes an attractive proposition. size. More than 70% of the people are in small-scale agricultural operation. Some of the few cultural factors that influence buyer behaviour are: 1. Economic factors The quantum of income & the earning stream are one of the major deciding factors.with the size of the family & that s where rural India with joint family structure s. what the customer wil l be able to buy. In India. The marketer needs to understand the role played by the buyer s culture. there are so many different cultures. was not well accepted. Many people in the rural market are below poverty line & for large number of people. 5. when the same Sumo was re . which determine to a great extent. Brand preference and loyalty (80% of sale is branded items in 16 product categories) Cultural factors influencing consumer behaviour Cultural factors exert the broadest and deepest influence on consumer behaviour. variety & price) Companies need to assess the influence of retailers on both consumers at village shops and at haats. which was launched in rural India in a white colour. 7. Place of purchase (60% prefer HAATS due to better quality. These factors affect the purch ase decision. a.

Another good example would be Philips audio systems. LCV s .launched as Spacio (a different name) and in a bright yellow colour. 4. with a larg er seating capacity and ability to transport good. Decision-making by male head: The male in Indian culture has always been given t he designation of key decision maker. land. the Mukhiya s opinion (Head of the village). For example. However. Social practices: There are so many different cultures. in most cases. In rural areas. which are big in size and get accepted in rural India by their sheer size. is shared with the rest of the village. the acceptance was higher. in rural India. Thus Philips makes audio systems. For example. Urban India looks at technology with the viewpoint of the smaller the better . That is the main reason for the large acceptance of big audio systems. Villagers used to buy one Lifebuoy cake and cut it into smaller bars. in a few villages they have common bath areas. This helped lifebuoy to introduce smaller 75-gram soap bars. which could be used individually. to tractors. Even in a house the male head is the final decision maker. and each culture exhibit s different social practices. Changes in saving and investment patterns From gold. 3. this trend is very prominent. b. the viewpoint is totally opposite. VCR s. 2.

000 villages are spread over 3. poor roads. smaller distributors in adjoining areas.113 villages with a population of more than 5. However. However.000. has evolved a hub and spoke distribution model to reach the villages. has built a strong distribution system which helps its brands reach the interiors of the rural market. To service remote village. The more daring MNC s are meeting the consequent challenges of availability. once a week. the rural consumer is not unlike his urban counterpart in many ways. Over the years. and inaccessibility to conventional advertising media. 700 million Indians may live in rural areas. bullock-carts and even b oats in the backwaters of Kerala. which considers rural India as a future growth driver. These distributors appoint and supply. LG Electronics defines all cities and towns other than the seven metros cities as r ural and semiurban market. it is an even greater challeng e to regularly reach products to the far-flung villages. power problems. India's 627. LG has set up 45 area off ices and 59 rural/remote area offices. the company depot supplies. Marketers must trade off t he distribution cost with incremental market saturation. large distributors which who act as hubs. Any serious marketer must strive to re ach at least 13. finding them is not easy. To ensure full loads. twice a week. Hi ndustan Lever. stockiest use autorickshaws. Coca-Cola. affor dability. a subsidiary of Unilever. large number of daily wage ear ners.4 A s approach of Indian Rural Market The rural market may be appealing but it is not without its problems: Low per ca pita disposable incomes that is half the urban disposable income. acceptability and awareness (the so-called 4 A s) »Availability The first challenge is to ensure availability of the product or service. India's largest MNC. seasonal consumption linked to harves ts and festivals and special occasions. To tap these unexplored country markets.2 million sq km. given the poor state of roads. . acute dependence on the vagaries of the monsoon.

It was a runway hit selling 100. Coca-Cola has addressed the affordability i ssue by introducing the returnable 200-ml glass bottle priced at Rs 5. Fair and lovely was launche d in a smaller pack. With low disposable incomes. Coca-Cola provi des low-cost ice boxes a tin box for new outlets and thermocol box for seasonal outlets. products need to be affordable to the rural consumer.»Affordability The second challenge is to ensure affordability of the product or service. Lifebuoy at Rs 2 for 50 gm . Bihar and U ttar Pradesh the so-called `Bimaru' States. The move is mainly targeted at the rural market. there is a need to offer products that suit the rural market.000 sets in the very fi rst year. »Acceptability The third challenge is to gain acceptability for the product or service. 5 crores in total premium. The insurance companies that have tailor-made products for the rural market have performed well. HDFC Standard LIFE topped private insurers by selling policies worth Rs 3. Coca-Cola has also int roduced Sunfill. Some companies have addressed the affordability problem by introducing small uni t packs. Therefo re. The initiative ha s paid off: Eighty per cent of new drinkers now come from the rural markets. a powdered soft-drink concentrate. among the first MNC s to realize the potential of India's rural m arket.Godrej recently introduced three brands of Cinthol. The instant and ready-to-mix Sunfill is available in a single-serve sachet of 25 gm priced at Rs 2 and multi serve sachet of 200 gm p riced at Rs 15. With large p arts of rural India inaccessible to conventional advertising media only 41 per cent rural hous eholds have access to TV building awareness is another challenge. Because of the lack of electricity and refrigerators in the rural areas. Fair Glow an d Godrej in 50-gm packs. In 1998. One company which has reaped rich dividends by doing so is LG Electronics. Hindustan Lever. has launched a variant of its largest selling soap brand. The company tied up with non-governmental organizations and offer ed reasonably-priced policies in the nature of group insurance covers. priced at Rs 4-5 meant specifically for Madhya Pradesh. the rural . however. Colgate toothpaste launched its smaller packs to cater to the travelling s egment and the rural consumers. it developed a customized TV for the rural market and christened it Sampoorna. most of who are o n daily wages. Most of the shampoos are available in smaller packs. Fortunately.

consumer has the same likes as the urban consumer the movies and music and for both .

It has also used banners. which alone reach ed 41 per cent of rural households. It doubled it s spend on advertising on Doordarshan. uses radio to reach the local people in their la nguage. the rural consumer h as the same likes as the urban consumer movies and music and for both the urban and rural co nsumer. Outing for the former is confined to local fairs and festival s and TV viewing is confined to the state-owned Doordarshan. posters and tapped all the l ocal forms of entertainment. Coca-Cola advertis ing stressed its `magical' price point of Rs 5 per bottle in all media. Hindustan Lever relies heavily on its own company-organized media. cinema and radio to reach 53. Coca-Cola uses a combination of TV. However. However. The key dilemma for MNC s ready to tap the large and fast-growing rural market is whether they can do so without hurting the company's profit margins.urban and rural consumer. Godrej Consumer Products. the family is the key unit of identity. »Awareness Brand awareness is another challenge. however. the rural consumer expressions differ from his urban counterpart. . The company uses local language advertising. These are pro motional events organized by stockiest. Philips I ndia uses wall writing and radio advertising to drive its growth in rural areas. Outing for the former is confined to local fairs and festivals and TV viewing is confined to the state-owned Doordarshan. Since price is a key issue in the rural areas. the r ural consumer expressions differ from his urban counterpart. which is trying to push its soap brands into the interior areas. Fortunately. Consump tion of branded products is treated as a special treat or luxury.6 per cent of r ural households. the family is the key unit of identity. Consumption of branded products is t reated as a special treat or indulgence. LG Electronics uses vans and road shows to reach rural customers.

At most times. logistical differences are very apparent. To increase market share. Farmers in states like Maharashtra and Andhra Pradesh have reaped the benefits of adopting new age farming practices. demographical. even created. increasing yields due to integrated crop management practic es and reducing the dependence on rainfall. due to the diversity of this market. Positioning and realities regarding the potential of each of these market segments differ and lie at the very core of forming the strategy for the rural m arkets. However. Geographical. As a result. If such a distinction is not mad e. behavioural change needs to be at the fo refront of any strategy. potential markets need to be found and at times. fert-irri gation and hydroponics. The as pirants are becoming climbers showing a sustained economic upturn as purchasing power is increasing i n the rural markets. However. plan and act locally.Evolving a New Marketing Mix for Selling to Rural Indians 12. with the investment in thes e systems lowering the cost of cultivation. This has radically changed the economics of farming. stati stical. It is therefore essential to develop an accurate Marketing Mix for selling to ru ral Indians. The face of Indian agriculture is changing from dry land and irrigated agricultu re into high-tech and low-tech agriculture. ability and willingness to pay. this works out to 1 in 8 people on Earth. Further. in dividual subsets of this market tend to be rather small and disparate. Such creation of demand needs efficient man agement of the supply chain. the need for a product or service is now adequately backed up with the capacity. the market still remains largely unexploited. Though the aggregate size is very large. Being able to successfully tap this growing market is every marketer s drea m. . marketers need to think.2% of the world lives in Rural India. Moreover. disposable income has grown sharply. A clear distinction needs t o be made with regard to the reality versus the image of rural India. we will be unable to distinguish between the serpent and the rope and the rope and the serpent. The rural market is not homogeneous. Put in a different context. myths abound. The growing incomes have mo dified demand patterns and buyer behaviour. India s rural markets are often misunderstood. The proportion of very rich has increased five-fold. including green house cultivation.

On average. When developing products in any category. Product developers should aim at eliminating all the cost-adding features. strong rose or jasmine perfume s are very popular with the rural women in South India. features which a consumer is unw illing to pay for as he sees no obvious utility. A common error has been to launch a completely stripped down version of the urba n product in the rural market. Habits take time to change and making unit sachet packs affordable is the key to inducing trial and purchase. Urban products cannot be dumped onto rural markets without modifications. in-depth research that can help understand the depths of the mind of the villagers. though levels of deficiency of nutrients have increased significantly over the past decade. Sachetization is also a distinctly rural-driven phenomenon.. purchase patterns and purchasing power are an essential i nput while developing rural specific products or services. This would redefine value in the minds of the consumer and tre mendously increase product acceptability. For instance. farmers usin g modern farming practices are unable to get an assured supply of such farm inputs due to draconi an legislation. However. Systematic. with the objective of offering the lowest possible price.e. i. A move to liberalize the sector could perhaps consider the accepted worldwide norm of allo wing manufacturers . shampoos or soaps with distinctive. This is not wh at a rural consumer wants. Product development is severely constrained by legislation in the case of agricu ltural inputs like fertilizers. marketers must identify the typical rural s pecific needs. no significant c hanges in formulations notified under the Fertilizer Control Order have taken place. This has severely restricted the availability of cost effective specialty fertilizers of global standards to Indian farmers.Product The Rural market is not a homogenous set of customers with preferences frozen in time. intensity of use is quite low. T echnological know-how for manufacture of such fertilizers exists within the country. As demand in several categories is being created. their buying criteria. In the case of fertilizers for instanc e. Tailor-made products are better received by the rural audience as the consumers feel empowered and tend to denti fy with the offering. The urban women do not identify as strongly with these perfumes. What is required is to introduce a product with essential features. insecticides and pesticides. rural folk would use a shamp oo only once a week. whose needs ar e recognized and for which the consumer is willing to pay (value-adding features).

with a strong R&D base to decide their own formulations with the government mach inery conducting checks on market samples of finished products to ensure that they live up to the labelled specifications.

This would be a major policy initiative that would give a huge impetus to innova tive product development in the farm sector. Product life cycles as are becoming shorter and these are having their impact on company life cycles. Thus for any company wishing to develop its product portfolio, allegiance to the classic American P-AL Principle of Partnership - Alliances - Linkages is a basis for survival. Pricing Every marketer must realize that the rural consumer is not a miser. He is not si mply looking for the cheapest product in every category. He understands and demands value for mon ey in every purchase that he makes. Pricing therefore is a direct function of factors includ ing cost-benefit advantage and opportunity cost. Pricing offered to consumers should be for value offerings that are affordable. Price sensitivity is extremely high and comparison with competit ive prices is common. Consumers seem to create narrow psychological price bands in their minds for product groups and price elasticity beyond the extreme price points is very high . The perceived utility or value of the product or service is the ultimate decision making facto r. It is certain however, that buying cheap is not the primary objective. Rather, i t is buying smart . A study revealed that the average rural consumer takes approximately 2 years to de cide on buying a watch! He will not do so unless he is totally convinced that he is getting value for Mo ney. Impulse buys and purchases for conspicuous consumption are also extremely few and far Between con sidering the value for money factor that reigns supreme in most rural purchase decisions. It must be remembered that the rural consumer does not have a budget problem. He has a cash flow problem. This is because the village folk receive funds only twice a year. At th ese times, he is capable of making high volume purchases. At all times, however, the unit price is critical and so is the pack size. Because of this, in the lean season when there is a cash flow crunch, marketers need to provide financial products, schemes or solutions that suit the needs of the rural population. Promotions & Advertising There are a lot of barriers that militate against homogenous media and message d elivery. These barriers stem from the fact that rural markets vary immensely in terms of tastes, habits and preferences leading to different expectations of every segment of the population.

However, one fact is certain across all areas. The rural consumer likes to touch and feel a product before making a choice. Demonstrations are undoubtedly the most effective promotional t ool that shapes purchase decisions of the rural population. Demonstrations establish the credent ials of any new technology used in developing the product. In today s information era, it is very important for companies to wise-up on emerg ing technologies. It has in fact become a medium to attract larger audiences for a product demonstrat ion. Technology must be used to prepare a database of customers and their requirements. The use of vi deo using mobile vans and even large screen video walls at events should be arranged. The classic conundrums of reach and coverage of the media are shattered. Several creative communication media have been used by various companies to tackle the problem of having to use visual communication and non-verbal communication to reach the rural audience. T his is required because a large proportion of the rural population cannot read or write. Allianc es with cottage industries, dharmsalas, panchayats, post offices and police stations for advertising have al so helped immensely. More importantly, in rural India, experience has proved time and time again that word of mouth is the key influencer. Intermediaries are the foundation to rural distribution. If the intermediary und erstands and is constantly reminded about your product, then the end user will not be allowed to forget. Th e companies must reinforce this highly effective medium and use all their innovation and money to m develop more dramatic point of sale and point of contact material. This becomes all the more important when in rural India, more often than not, the overlap between the product categories sold in a single outlet in tremendous. For instance, a store may call itself as a grocery store but will st ock everything from groceries to vegetables to fertilizers and may at times even stock medicines. In such cases, the point at which the customer actually comes in contact with a product may not be the point at which the sale is affected. The re-use capacity and colour of the container in which the product is packed i s also a crucial factor. In fact, reusable packaging is considered a major aid in promoting sales for produc ts in the rural market. Consumer and Trade schemes that Incentivise Spending using discount coupons, off season discounts, free samples, etc. encourage spending. Lucky draws and gift schemes are a major hit in most states.

Rural youth bring bran d knowledge to the households. Personal selling and opinion leaders: In personal selling it is required that the potential users are identified and awareness is created among them about the product. No high voltage publicity is required. An opinion leader in rural areas can be defined as a person who is considered to be knowled geable and is consulted by others and his advice is normally followed. one who pays can a ll be different. uses and benefits. This is the reason why opinion leaders and word of mouth are thriving among rural consumers. Youth power is becoming increasingly evident in villages. The rural consumer is very down to earth but equally discerning and marketers need to step into the shoes of the rural folk while creating produ ct promotion campaigns. There are other attributes in the promotion strategy which are explained as unde r: 1. several agribusiness companies have also started providing gift schemes with offers for free jewellery that influences the ladies to pressure the farmers to purchas e agricultural inputs from select companies. This promotion strategy thus makes women influence purchase de cisions that they would ordinarily not be involved in. etc. stickers. Mass media: In the present world mass media is a powerful medium of communica tion. The persons involved in the purchase process -influencer. This has forced several companies to change the focus and positionin g of their products and services towards this segment that is growing in absolute number and relative in fluence. Cinema Radio Print media: Handbills and Booklets. In fact the word of mouth information holds lot validity in rural areas even today. This can be achieved only by personal selling by highly motivated sales person. buyer. Another unique feature of rural markets is that the Decision making process is c ollective. . Apar t from regular household goods. its features. The following are the mass media generally used: Television. decider. The opinion leaders may be big landlords or politicians or progressive farmers. posters. 2.The use of local idioms and colloquial expressions are an excellent way to strik e a rapport with the rural consumer and must be borne in mind when developing media plans and public relati ons programmes. banners. So marketers must address brand messages in their campaigns at several levels.

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distribution & consumption is very different from a town or city. 5. On considering these questions. Neville Gomes.3. thus the general marketing theories can t be applied directly in rural markets. Reaching the right place is the toughest part in today s rural marketing. Mandi and Mela magic At last count. Of these 25. for products tha t need concept marketing and those that have high prices. brand reminder and word of mouth. Thus. t hese products fails to reach the village as the distribution channel fails to put in the required efforts. People come to melas to have a good time and are not reminded of such high technology or high priced products when they return home. There is however. In the words of M r. Managing Director of Multimedia Aquarius. a caveat when an organization is considering using mela for ma rketing their products. A village as a place for promotion. a large amount of qualitative judgment is indeed in planning promotions at melas by media planners. The largest such mela is the Maha Kumbh Mela which i s visited by an average of 12 crore people. it has been observed that melas are fit to gener ate product exposure. Tractor owners (tonee) conducted by MRF Limited is one such example. promotion at melas is like a one night stand . package familiarity. cultural festivals as well as local fairs and events. 3 lakh people visited the annual mel a at Navchadi which lasts for 7 days in Meerut.000 melas. m usic and caparisoned elephants to promote their brand of tea. On an average. the rural .000 meals are held to signify religious. Special campaigns: During crop harvest and marketing seasons it is beneficial to take up special promotion campaigns in rural areas. visitors at these melas spend between Rs. such melas are not suitable promotion media. For example. However.000 to Rs. Brooks Bond carries out marches in rural areas with band. but due to higher distribution costs. Mo st of the times. Place place is the major reason behind the evolution of rural marketing as a distinct discipline. Is the audience at this mela fit for promotion of the product at hand? What are the psychographics of this audience? What is the motivational and behavioural impetus that brings visitors to each of these melas. 50. This is because the time and the mood of the people that visit these melas are not right to dige st technical information or for making large purchases. There will be no reminder later. India witnessed over 50.000 a day. as most of the products reach up to the nearest townships of any village.

.3 lakh villages. T he reason for this is very clear when we consider that on an average.000 per outlet.retailers themselves go to the urban areas to procure these goods. On the other hand. the selection and use of distribution channels is a nightmare. Thus. Significance of Distribution No matter how well devised a company s product.5. Urban and Rural India both have appro ximately 3 million retail outlets. The diversity in the distribution of shops is the self-limitin g factor in terms of servicing the rural distribution network. Rural markets imply complex logistical challenges that show up as high distribution costs.000 towns where these outlets ar e located. the most crucial link in ensuring the success of rural marketing efforts is distribution. mark eters are faced with the problem of feeding 3 million shops located in vastly diverse areas each of which records an average sale of only Rs. Rural India s 3 million outlets are located in 6. Urban India has only 4. pricing or promotion strategy. However. Distribution mu st be strengthened and this would raise investment cost barriers for new entrants. In Rural India. Further compounding this problem is the fact that e ven this meagre sale is mostly on credit.

cultural and economic interchange. They have been held on a regular ba sis across the length and breadth of the country for over 1000 years. This is due to the fact that it is at assembly markets that auction yards are present where the farmers congregate to sell their output. A TV will not be sold there as the cash flow does not exist at that point in the hierarchy of markets. they are cash rich and can afford to make such purchases. After such sale of produce. Being present in 6 lakh villages is virtually impossible for an organization of any size. For durables where the outlay involved is typically large. Rural wealth and demand is concentrated typically at satellite towns. Keeping the hierarchy in mind will help decide the optimum level of penetration required to reach a critical mass of rural cons umers. more controllable. easier to reach and service. A television distributor must be present at assembly markets which a re much smaller in number. Rura l folk are habituated to travelling once a week for their weekly purchases to a satellite town. It is therefore not necessary for a marketer of TV sets to take their distribution channel all the way down to the village shop. district headquarters. the purchase would be made in an assembly market for reasons of choice and availability of adequate cash flow. Haats Haats are the nerve centre of Rural India. They do n ot expect such items to be present in every village. It is essential for rural marketing companies to understand this hierarchy. asse mbly markets and such central locations.The distribution of outlets however shows that a marketer need not be present in all markets at all times. . Rural distribution has a rigid hierarchy of markets that make channel decisions relatively structured. Haats are seen as a place for social. Right from the time of Chandragupta Maurya. They are a readymade distribution net work embedded in the fabric of rural society for over 1000 years.

This is because. T he dealers' feedback needs to be obtained as the direction for future strategy emanates here. incorporating haats in the distribution strategy of a rural marketing organization selling con sumer goods and FMCG products (typically once a week purchase items) is a tremendous opportunity. 5 to 7% is conducted on barter system and the rest 3 to 5% is on credit. Marketing in Rural India is undoubtedly a long-haul exercise and one that involv es great expense. It is essential to educate and involve him as he is the local company representative and is the only member in the channel of distribution that is in direct contact with the final consumer. everybody knows everybody. Considering that the average populatio n of an Indian village is approximately 1000. a large num ber of retailers and subwholesalers buy from haats for their village stores. Perhaps the other most important factor to consider while developing rural distr ibution strategy is that the move from transactional marketing to relationship marketing is most evident in the village market.One in every five villages with a population of over 2000 has a haat. Only those with a strong mind. Traditionally. Typically. A lot of re-distribution also occurs through haats. the system gets derelationalised. Participation fees at haats are a flat Re. A haat usually serves around 5000 visitors. Conside ring that over 5000 visit a haat from 5 villages. Apart from the 9 0% cash sale. a tough heart and stiff hands survive. There is also a need to realise that the dealer is the company's "unpaid" sales force. A strong bond needs to be created with every consumer even in the remotest village and the smallest town. Also attractive to companies wishing to use the system is the low selling overheads. an average haat will have close to 300 stalls. T hus. These rural super markets are much larger than all the world's K-ma rts and Wal-marts put together. MARKRTING STRATEGIES TO CAPTURE RURAL INDIA . A study estimates that 47.1 to Rs.5 per stall and this rate is common to a giant like Hindustan Lever and the smallest local selle r. Distribution costs must be reduced through optimum utilization of the network. in village shops a lot of credi t sales occur due to the fact that in a small geographic area of a village. each haat serves 5 villages. In village s with less than 2000 people this figure reduces to 1 in 20 villages. What is most attractive to marketers is that 90% + of sales in haats are on cash basis.000 h aats are conducted in rural India.

Focus on select markets.BY PROPER COMMUNICATION IN INDIAN LANGUAGE The companies have realized the importance of proper communication in local lang uage for promoting their products. They have started selling the concept of quality with proper communication. this positioning of technology is very crucial. Now they know the difference between the products and the utilities derived out of it. There is a trade of between Quality a customer perceives and a company wants to communicate. With their promotion..BY COMMUNICATING AND CHANGING QUALITY PERCEPTION Companies are coming up with new technology and they are properly communicating it to the customer. Their main focus is to change the Indian customer outlook about q uality.. The organization can do the following thing to start with: . . Thus. As a rural Indian customer always wanted value for money with the changed perception. The important thing is that approp riate segmentation basis need to be applied. Focus on select villages... one can notice difference in current market scenario. . rural customer started asking for value for money. .BY TARGET CHANGING PERCEPTION . The perceptio n of the Indian about the desired product is changing. SEGMENTATION OF RURAL MARKET The first step is to develop & implement any strategy for the rural market shoul d include the appropriate segmentation of the rural market. . Different product categories have differe nt rural markets to cater to & these can be selected by applying different criteria of segmentati on.

BY ASSOCIATING THEMSELVES WITH INDIA . However. Breeze.BY PROMOTING PRODUCTS WITH INDIAN MODELS AND ACTORS Companies are picking up Indian models. is the paradigm changing and customer no longer price sensitive? Indian customer was ne ver price sensitive. They are ready to pay premium for the product if the product is offering some extra utility for the premium. Thus. they are exploiting soci al and cultural values. Villagers are constantly looking forward for new branded products..BY PROVIDING WHAT CUSTOMER WANT The customers want value for money. Cultural values play major role in deciding what to buy. "Nokia" has launched a simple product. but they want value for money. even when t hey can use Neem or Babool sticks or Gudakhu.If one go to villages they will see that villagers using Toothpaste. . What can one infer from these incident s. They are happy with such a high technology that can fu lfil their need. rural people are emotional and sensitive. As "Motorola" has launched... to promote their brands. which has ca ptured the market. seven models of Cellular Phones of high technology b ut none took off. villagers are using soaps like Nima rose.BY UNDERSTANDING CULTURAL AND SOCIAL VALUES Companies have recognized that social and cultural values have a very strong hol d on the people.. if the seller provides frills free of cost they are happy with that. On the other hand. They do not see any value in frills associat ed with the products. actors for advertisements as this helps them to show themselves as an Indian company. . even when they can use locally manufactured very low priced soaps. They aim for the basic functionality. Diana Hyden and Shahrukh Khan are chosen as a b rand ambassador for MNC quartz clock maker "OMEGA" even though when they have models like Cindy Crawford. C inthol etc. . . Moreover.

That is why companies like Daewoo based their advertise ments on a normal Indian family. during world cup they hav e launched a campaign "Jeeta hai jitega apna Hindustan India India India".BY DEVELOPING RURAL-SPECIFIC PRODUCTS Many companies are developing rural-specific products. Keeping into consideratio n the requirements. . . and to withstand long power cuts. With this. LG has launched a campaign "LG ki Dua. a firm develops these products. Electrolux is working on a made-fo r India fridge designed to serve basic purposes: chill drinking water.BY TALKING ABOUT A NORMAL INDIAN Companies are now talking about normal India.BY PROMOTING INDIAN SPORTS TEAM Companies are promoting Indian sports teams so that they can associate themselve s with India. keep cooked food fresh. they influence Indian mindset.. ITC is promoting Indian cricket team for years. Nokia has designed a new cellular phone 5110. Whirlpo ol has also launched a campaign during world cup.. If he/she can visualize himself/herself with the product. Similarly. with the India tri-colour and a ringing tone of "Sare Jahan se achcha". It is a normal tendency of an Indi an to try to associate him/her with the product. by explicitly saying that they are Indian.BY GIVING INDIAN WORDS FOR BRANDS .. .MNCs are associating themselves with India by talking about India.. all the best". . M-TV during Independence Day and Republic daytime make their lo go with Indian tri-colour. he /she become loyal to it.

Hindi. soon they realized that to succeed in India they have to reach the nook and the corner of the country. MNCs have found that it is much easier for them to operate in India if th ey acquire an Established Indian Brand. Brook Bond Lipton India ltd used magicians electively for launch of Kadak Chap Tea in Etawah district.000.BY ADOPTING LOCALISED WAY OF DISTRIBUTING Proper distribution channels are recognized by companies. Reebok.. The word is a part of the Bengali. In the past one year. the lights are switched of and a torch is flashed in the dark (EVEREADYs tact). Local Baniya " only they can succeed. . . radio. The distribution chann el could be big scale Super markets. while the modern media includes TV. Electrolux has acquired two Indian brands Kelvinator a nd Allwyn this has gave them the well-established distribution channel. MNC shoe giants. In between such a show. They have to reach the "local Paan wala. Like LG has used India brand name "Sampoo rna" for its newly launched TV. but later on they realized that to sur vive in the market and to compete with their competitor they have to rejuvenate these brands.BY ACQUIRING INDIAN BRANDS As Indian brands are operating in India for a long time and they enjoy a good re putation in India. As well as trust o f people.. Marathi and Tam il tongue. puppetry. they were wrong. C itra and Limca so that they can kill these brands. as people believe these brands. folk t heatre etc.Companies use Indian words for brands. LIC uses puppets to ed ucate rural masses about its insurance policies. Adidas. and e-chaupal. and Nike started with exclusive stores but soon . . they thought that a similar system can be grown in Indi a. Similarly Coke has acquired Thumps up. LG has sold one lakh 20-inch Sampoorna TVs. Govt of India uses puppetry in its campaign s to press ahead social issues.. They can either go for the tra ditional media or the modern media.BY EFFECTIVE MEDIA COMMUNICATION Media Rural marketing is being used by companies. The traditional media include melas. Gold Spot. all in towns with a population of around 10. However.

MELAS Melas are places where villagers gather once in a while for shopping. .. Companies take advantage of such events to market their products. . Recently Luxor Writing Instruments Ltd. who is promoted by Reebok.PAINTINGS A picture is worth thousand words. Dabur uses these events to se ll products like JANAM GHUTI (Gripe water). Product Strategies . a JV of Gillette and Luxor has launched 500 "Gajgamini" ranges of Parker Sonnet Hussain special e dition fountain pens. Escorts also display its products like tractors and motorcycles in such melas.. This pen is signed by Mr. Companies are promoting players like Bhaichung Bhutia. Makbul Fida Hussain a renowned painter who has created "Gajgamini" range of paintings.BY ASSOCIATING THEMSELVES WITH INDIAN CELEBRITIES MNCs have realized that in India celebrities enjoyed a great popularity so they now associate themselves with Indian celebrities. 5000. priced at Rs.. . COKE. so that they can associate their na me with players like him and get popularity. Rural people like the sight of bright colors. and to capture the market share in India they have to go the local market shoe sellers. They have to reach to local cities with low priced products.they realized that they do not enjoy much Brand Equity in India. NCAER estimates that around half of items sold in the se melas are FMCG products and consumer durables. PEPSI and TATA traders advertise their products through paintings. The message is simple and clean.

Also the Red Label Rs. Small unit packing: Given the low per capita income & purchasing habits of t he rural consumers. rough roads & frequent power fluctuations. Sturdiness of a product eithe r or appearance . which can be employed to develop or modify the products to targets the rural market. It is also introduces messaging in Hindi language now. New product designs: Keeping in view the rural life style the manufacturer an d the marketing men can think in terms of new product designs. F or them.00 pack has more sales as compared to the large pack. This method has been tested by products life shampoos. 2. transportation & storag e. They allow consumers to buy only what they need. The product should be sturdy enough to stand rough handling. all these environmental factors must be considered while developing the products meant for rural audience. in some of the economically priced models in or der to cater to the semi-urban or rural consumers. Single serve packets or sachets are enormously popular in India. Sturdy products: Sturdiness of a product is an important factor for rural con sumers. Small packing s stand a good chance of acceptanc e in rural markets. can be classified as follows: . small unit packages stand a good chance of acceptance in rural market . The advantage is that the price is low and the rural consumer can easil y afford it. biscuits. Its design has been modified to protect it against rough usage in rural environment.1. T hus. The small unit packing s will definitely attract a large number of rural consumers . 3.The specific strategies. 3. This is in real terms. T his is because it is very affordable for the lower income group with the deepest market reach making easy access to the end user satisfying him. Vicks cough drops in single tablets. tooth paste. experiment with new products. etc. thinking global & a cting local. The rural product usage environment is tough because of rough handling. heavier weight meant that it has more over and durability. pickles. The experience of torch light dry battery cell manufacturers supports this because t he rural consumers preferred dry battery cells which are heavier than the lighter ones. Nokia s 1100 model is a very good example of a customized model for rural markets. it is dust resistant & has a small torch light in view of the frequent power cuts in rural India. & conserve cash at the same time.

is an important for the rural consumers. .

Many a time s rural consumers ask for peeli tikki in case of conventional and detergent washing soap. The fertilizers companies normally use a logo on the fertilizer bags though fertilizers have to be sold only on generic names. Pricing strategies .: Coca-Cola targeted the whole Indian rural market with the positioning of Th anda Matlab Coca-Cola advertisements because most of the villagers say when wanting a drink r efer to it as Thanda so Coca-cola used that word. Developed and introduced a low cos t medium wave receiver named BAHADUR during the early seventies. e. the rural consumers do give their own brand n ame on the name of an item. Nirma made a peeli tikki especially for those peeli tikki users who might have e xperienced better cleanliness with the yellow colored bar as compared to the blue one altho ugh the actual difference is only of the color. Initially the sales were good but declined subsequently. 5.g. On investigation it was found that the rural consumer bought radios not only for information and news but also for entertainment. Utility oriented products: The rural consumers are more concerned with utilit y of the product and its appearance Philips India Ltd. Brand name: For identification.4. A brand name or a logo is ver y important for a rural consumer for it can be easily remembered.

2. is delivering very good results for a large number of FMCG product categories. Low volume-low price strategy: This strategy of reducing prices by reducing t he package size in order to make it appear more affordable. In categories where maintaining the price point is extremely critical. Large volume-low margins (Rapid or slow penetration strategy): Marketers have to focus on generating large volumes & not big profit margins on individual product s. 7. etc. 4. 3. Refill packs / Reusable packaging: In urban areas most of the health drinks a re available. th e strategy should be to cut down the production. the rural people can efficiently reuse the plastic bottle of hair o il. tea. most of the times. distribution & advertising costs & passing on these benefits to the customers to further increase the turnover. shampoo sachets. expanding the market. Application of value engineering: in food industry. thus. For example. ghee etc can be reused. as was done by Coca Cola. Ariel Super Compact. The manufacture has to ensure price compliance either through promotional campai gns. coffee. If they price their product at a level which can lead to good volumes. in the rural markets of India. The price c an be kept low by low unit packaging s like paisa pack of tea. Pet jars free with the Hasmukhrai and Co Tea. Overall efficiency & passing on benefits to consumers: For rural products. Similarly the packages of edible oil. Ensuring price compliance: Rural retailers. Low cost/ cheap products: This follows from the product strategy. If an organiza tion gets the price point right. then it can work in rural market. this strategy is delivering v ery good results. so tha t a larger segment can afford it. . it has b een observed that advertising has less to do with product sales in the rural areas. then they can still gen erate good returns on the capital employed. The containers can be put to multipurpose uses.1. vicks 5 grams tin. Milk protein is expensive while Soya protein is cheaper. or by ensuring the availability of products at the retail out lets directly. 6. Soya protein is being use d instead of milk protein. charges more t han the MRP. Such measures can a significant impact in the rural market. 5. Most often. this is a common strategy widely adopted by many manufacturing and marketing concerns . but the n utrition content of both is the same. The basic aim is to reduce the value of the product.

Think Global Act Local Rural population is diverse. 5. Promotional message should highlight only the functional values of the product & explains how those values can make the consumer s life even better & solve any of his problems. 2. It i s preferable that it has only a few propositions at a time. Bombarding rural consu mers with too much. w hich can be easily understood. storyline. The only we can have insights like Thanda matlab Coca Cola . There should be the use of language writers who understands the rural & regional pulse better.Promotion strategies Customized promotional media & messages need to be developed by the organization s to effectively target the rural market. For that. Narrative Story Style The promotional message can be delivered in the form of an entertaining story wi th a message depicting how the brand delivers larger good to the family & society. But the context. 3. Simplicity & Clarity All promotional messages targeted at rural audience need to be simple & clear. & they should not include any confusing elements. The theme of the story line can be about how the product can solve the problems of t he rural consumers. the theme of the advertisement needs to revolve among universal themes. language & idioms should be such that the rural audience of different rural market segments can relate to. Choice of Brand Ambassador . 4. such as family-love. in less time can easily confuse them & leave them bewildered. but the commonalities of their ethos & simple livin g habits need to be understood for advertising to succeed. Think in Local Idiom This is the need of the advertising professionals who can think like the rural p eople. The following strategies can be considered while developing promotional campaigns for the rural markets: 1.

The following distribution strategies formulated for the rural category. . The road blocks to reach the rural customers are: · Lack of adequate transport facilities. it is almost impossible to trans plant strategies which work successfully in urban markets onto rural markets. The marketers were of the opinion that the villagers would come to nearby towns and buy the products that they want. · Large distances between villages. extensive r etailing and sustained pull generation through mass media advertising. That is why Govinda in the Mirind a as boosted the sales of the drink in the rural markets. An organization might spend a lot of money in hiring a brand ambassador only to find out later that it had little imp act on the rural consumer. namely. Unfortunately. · Lack of proper retail outlets · Lack of mass media infrastructure.Brand Ambassador for the rural markets need to be picked carefully as urban succ esses might not get replicated in the rural markets. · Lack of pucca roads connecting villages to nearest townships. What has been found is that if we have to serve the rural consumer we will have to take our products to him through the channels that he is using and some innovative ways o f getting to him. DISTRIBUTION STRATEGY Many companies view the rural markets as great opportunity for expanding their s ales but find distribution as a major problem.

Coverage of villages with 2000 and above population: Ideally. t hese outlets also stock consumables agricultural inputs like fertilizers.1. Segmentation: the number of villages in India is huge & it is not viable to c ontact & serve all villages directly. pesticides and seeds. Utilization of multipurpose distribution centers by petroleum/oil companies: In order to cater to the rural areas the petroleum/oil companies have evolved a concept o f multipurpose distribution centers in rural areas. By doing so the percentage of villages covered comes to only 10% of all the village s. farmer s service c ooperatives and other multipurpose cooperatives. lubricants. Su ch state level federation can be motivated to procure and distribute consumables items and low value durable items to the members to the society for serving to the rural consumers. These cooperatives have an arrangement for cent ralized procurement and distribution through their respective state level federation. 3. Use of co-operative societies: There are over 3 lacks co-operative societies operating in rural areas for different purposes like marketing cooperatives. 2. kerosene. co-operatives as well as private entrepreneurs. Many of the societies extend credit to the members for purchases. which have a population of 2000 p ersons & above each. It is es timated that there are about 450 such outlets in operation in the country. With a distribution network in about 55. sugar. coverage of vil lages with up to 2000 and above population could be the break-even point for a distribution setup. The revamped PDS places more emphasis on reaching remote rural areas like the hi lls and tribal s. In addition to petrol/diesel. 5. These shops are run by the state civil Supplies Corporation. Utilization of public distributory system: The PDS in the country is fairly w ell organized. This strategy is good to begin with & then subsequently.000 villages. to the extent of about 40 to 45 percent. Therefore. The rural consumer who h as tractors. Here again there is an arrangement for centralized procurement and distribution. one can cover about 25 crores rural consumers. oil . companies or distributors can carefully examin e the market potential of different villages & target the villages that can be served in a fi nancially viable manner through an organized distribution effort. edible oils and others to the consumers at a reasonable price. The purpose of PDS is to make available essential commodities like food grains. The manufacturing and marketing me n should explore effective utilization of PDS. but the rural population covered will be substantial. The sho ps that distribute these commodities are called fair price shops. 4. villages with lesser populations can be added.

bullock-carts. This distribution can be done by mopeds.000 fairs are held in the country and the estimated attendance is about 100 million rural consumers. It is estimated tha t over 5. Only temporary shops co me up selling goods of all kinds. cycles. It can be beneficial for companies to organize sales of thei r product at such places. Merits: Convenience: The entire market can be related to large departmental stores in ci ties. depen ding upon the township. Shandies/Haaths/Jathras/Melas: These are places where the rural consumers con gregate as a rule. Such places attract large number of itinerant merchants. Afterwards. Jathras a nd melas are held once or twice a year for longer durations. as there will be ready captive audience. there will be enterta inment. 7. t orch cells and other durables and consumer products. These outlets crop up every week. 6. jewelry. Promotion can be taken. providing consumers immense choice and prices. where the advantage is a one-stop shopping exercise. the feeder markets and mandi towns offer excell ent scope for distribution. While shandies/heaths are held a particular day every week. Biggest fair Pushkar Mela is estimated to attract over 10 million people. radios. From the feeder markets and mandi towns th e stockiest or wholesaler can arrange for distribution to the village shops in the interior places. which attract urbanite also like Ma nkanavillaku in Malappara in Kerela.engine pump sets and mopeds frequent these outlets for their requirement. camelbacks etc. T he markets start early and will be over by lunch. Distribution up to feeder markets/mandi towns: Keeping in view the hierarchy of markets for the rural consumers. Attractive: The weekend shopping is not only convenient but also entertaining.P. There ar e 50 such big rural fairs held in various parts of country. Kumbh Mela at Hardwar in U. They are normally timed with rel igious festivals. hardware. For con vincing the manufacturing and marketing man with regard to the importance of these places fr om rural marketing point of view a visit to such places is necessary. The rural customers visit these towns at regular intervals not onl y for selling the agricultural produce but also for purchasing cloth. These outlets can be profitably utilized for selling consumables and durable items also. In . Periya Kirthigai at Tiruparunku naram in Tamil Nadu.

Example of Varana Nagar in Maharashtra proved an eye opener in this regard where the sugar and milk cooperatives have totally changed the life style of people. Household goods. cattle. buying in bulk for. 8. both in cooperative & private se ctor. as the salesmen a re the resident of the village or community itself. durables. machinery. Similarly a co-operative supermarket called Chint amani in Coimbatore (T. a week and the bargaining advantage attract the fru gal and weeklong hard working rural folk. Availability: It is a market for everyone and for everything. farming equipment.respect of transactions. Joint distribution by Non-competing Companies: As the cost of distributing th e products in the rural market through distribution vans can be unviable for a single compa ny. making it easier to sell the product & maxim ise sales for the company. c lothes. 10. It adds a personal touch to the marketing. Personal Selling Network: It is very successful distribution channel being d eveloped by companies like HUL. Agricultural Input Dealers: Fertilizers should be made available to the farme rs within the range of 4-5 km from their residence. This is why there are about 2 lakh fertilizer dealers in the country.N) arranges free transit of rural consumers to the supermarket of their purchases. jewellery. 9. the entire operation can become financial ly viable for all the players. The supermarket in Varana Nagar c aters exclusively to rural consumers. different non-competing companies can come together to jointly operate distribution vans f or the rural market. THE OLD SETUP . as per the essential commodities act. Further the freshness of t he produce. raw materials and a h ost of products are available. This will enable them to share the cost of operating the van & on accoun t of the sharing of the cost by four or five companies. it is an attractive place to those who want to buy seco nd hand durables and to those who prefer barter transactions.

Retailers There are different kinds of retailers. Wholesalers The Indian wholesaler is principally a Galla Kirana (food-grain) merchant who su stains the belief that business is speculative rather than distributive in character. Village retailers have traditionally been among the most mobile of rural residen ts. · Shops within the village · Shops located on the main road and not exactly within the village · Kasba market or the tahsil market. Retailer. Often doubling up as money lenders. There was no need for active sales gro wth. and Bazaars & Shadies. 2. The reason for this speculative character and dormant role of wholesalers are: Indian market was largely sellers market. Rural markets were neglected by many. As a result of retail based distribution was weakened. Their multi person interaction in the closed village society. Companies laid more emphasis or retailers in urban areas. He is a trader / commodity merchant rather than a distributor and therefore tend s to support a brand during boom and withdraw support during slump. Vans. Weekly Haats. The occurrence of retail outlets was low. Therefore many companies were dependent on whole salers.The historically available people & places for distribution include: -Whole sell er. 1. who are very large in number. The current need is to activate and develop wholesaler of the adjoining market a s a distributor of products to rural retail outlets and build his loyalties to the c ompany. .

His role as influence leader is indisputable. From tender twig of neem to washing powder retailer testimony has been vital part of the product adoption process. III. Retailers helps in identification and selection of brands.) II. BRAND PROMOTER: . In rural market retailers remains the deciding factor to sell particular brand. there is less influence of shelf displays and point of purchase promotion. . The role of urban retailer is weak. as urban consumers do not trust him completely. CREDIBILITY: . I. . Presence of spurious brands is an ample testimony to this view. recommend the brands. The urban consumers have numerous sources of information. -He is seen as a businessman with profit motto. . (The urban retailer has a limited role as a brand promoter. -His view points are evaluated with other sources of information. . He enjoys the confidence of the villagers. Although retailer s opinion is sought it may not be 100% believed and followed. He is to intelligently drive home his recommendations. -It is through shelf displays and incentive offers that he has to push the . He cannot directly.As a result retailers play a significant role. His views are accepted and followed by the rural people whose awareness and media exposure levels are low. . INFLUENCE LEADER: . . (-The urban retailer is not trusted.

) V. In an environment relatively isolated from external developments. (-on the contrary. 25 days a month. The relationship could extend beyond three generations. This limits the time span and perspective of the retailer customer relationship. he has been harbinger of change. HARBINGER OF CHANGE . each van traveling around 125 km a day. RELATIONSHIP MARKETER . . the urban retailers have to make an effort to adopt relationship marketing. if not more. Village retailer practices relationship marketing.brands. have an important place in distribution and promotion of the products in villages. His customers base comprises largely the mobile service class prone to shift residence at least once. JK Dairy launched whitener Dairy Top in small 50 gm sachets priced at Rs. . (As against this. 6. . wielding limited influence in changing the product choices and quality of life of consumers. we find urban retailer.) IV. in less than a decade. He caters to a set of buyers who have income from immovable land resources and would be static over a much longer time span. It decided to make a concerted foray into rural India in 1996. . backed by historical credibility of the retailer as a product referral. It hired va ns to penetrate the rural interior.) 3.50. He is one of the main sources of information and opinion as well as supplier of product and services. Vans Mobile vans long since.

Fairs Direct Communication Cinema Wall Paintings Dealers Press Hoardings Sales Persons TV Leaflets Video Vans Folk Media Animal Parade Transit Media Researchers . Its location changes every week. Melas. Formal media . Thes e markets are very well organized with shopkeepers having pre-assigned spaces for them to sell their wares. But they are strikingly similar in what they sell. It is reported that there are. Media Vehicles Through the rural markets offer big attractions to the marketers. Shandies The haats are the oldest outlets to purchase household goods and for trade. in all. one of the mos t important questions frequently asked is How do we reach the large rural populatio n through different media and methods? Mass Media Local Media Personalized Media Radio Haats. A typical market is in an open field with ample space for displaying all sorts of goods.000 haats held throughout the country. Bazaars. These markets have different names in di fferent regions.4. Weekly Haats. about 47.

Television: It has made a great impact and large audience has been exposed to this medium.P. Regional TV channels have become very popular especially in Southern states. TV: 27%. Newspapers and magazines: English newspapers and magazines have negligible circulation in rural areas. H LL has been using TV to communicate with the rural masses. . .. TV. Examples: Newspapers: Eenadu in A. Lifebuoy. Radio: . Dina Thanthi in Tamil Nadu. Many consumer goods companies and fertilizer companies are using these TV channels to reach the rura l customer. Loksatta in Maharashtra and Tamil magazine Kumudam are very popular in rural areas. Radio.It includes Press and print. Lux. P unjab Kesari in the North. Examples: SUN TV is very popular even in rural ar eas in Tamil Nadu and Asianet is a preferred regional channel in Kerala. Cinema: 30%. Cinema. How ever local language newspapers and magazines are becoming popular among educated facilities in rural areas. and Point of purchase and Outdoo r advertisement. Reach of formal media is low in rural households (Print: 18%. and Radio: 37%) and therefore the marketer has to consider the foll owing points: . Nihar oil etc are some of the products advertised via television.

The farmers have a habit of listening to regional news/agricultural news in the morning and the late evening. The monthly char ge for showing an ad film is within Rs. Jyoti Labs. . There are specific programmes for farmers like Farm and Home/Krishi Darshan in regional languages. pictures and colours should be used in POPs meant for rural markets so that they can easily identify the products. which includes signboards. Examples: Films on p roducts like Vicks. product display boards etc. The adverti sement has to be released during this time to get maximum coverage in rural areas. Village theatre s do roaring business during festivals by having four shows per day. Zandu Balm. Example: Colgate. Outdoor advertisements: This form of media. Another advantage is that the radio commercial can be prepared at short notice to meet the changin g needs of the rural folk. bus boards.Radio reaches large population in rural areas at a relatively low cost. Ad slides can also be screened in village theatres. Cinema: About 65% of the earnings from cinema are from rural markets.500. dealer boards. Zuari industries are some of the companies using radio communication programme. Lifebuoy and SPIC fertilizers are shown in rural cinema halls. Apart from films. . hoarding. . tree boa rds. wall painting. is cost effective in rural ar eas. Symbols. Karnataka and Andhra Pradesh. Generally rural people prefer bright colours and the mark eter should Utilize such cues. Local distributor or dealer who has good co ntacts with cinema houses in villages can easily monitor this activity. Example: Release of a pesticide ad at the time of outbreak of a pest or disease in crops. Film viewing habit s is high in certain states like Tamil Nadu.

pesticides. The walls have to be pai nted at least one or two feet from ground level. toothpaste. slogans for catching the attention of people. use wall painting as promot ion medium in rural areas. It is better to take permission of the owner. bran ded coffee/tea. The matter should be in the form of pictures. . fans. Retailers welcome painting of their shops so tha t the shop will look better. Paint ing to be avoided during election time and rainy season. Walls of farm houses. Very often the owner takes responsibility for taking care of the wall painting. Point of purchase: Display of hangings. festoons and product packs in the shops will catch the atte ntion of prospective buyers. It is a medium employed by the a dvertiser to bring in a personal touch. The cost of paintin g one square foot area is just Rs. Companies marketing TV. Direct mail advertising: It is a way of passing on information relating to goods or services for sale.. . fertilizers etc. Wall paintings: It is an effective and economical medium for communication in rural areas. . However a clutter of such POP materials of competing compani es will not have the desired effect and is to be avoided. di rectly to potential customers through the medium of post.10. since it stays there for a long time depending upon the weather conditions. In cities lot of junk mail is received by all of u s and very often such mails are thrown into the dustbin whereas a villager get very few letters a nd he is receptive to such mailers. shops and schools are ideal places for p ainting and the company need not have to pay any rent for the same.

. Fertilizer and pesticide companies in rural areas extensively use tree boards. Farm-to-Farm/House-to-House visit: Rural people prefer face-to-face communication and farm visits facilitate two-wa y communication. . The cost of such a painted board is about R s. bullock carts and tractors and people walking on the road. Considering the poor conditio n of roads. These are low priced promotion items an d can be used by consumer goods companies too. These boards attract the attention of slow moving vehicles like cy cles. These boards are fixed to the trees on both sides of the village road at a height of a bout 10 feet from ground level. Companies to suit the specific requirements of rural com variety of such media effectively and some of the more important med given below. even the buses move at slow speed through village road.Informal/Rural specific media These media lizing the promotional munication are using a ia and methods are with effective reach and personalized communication will help in rea objectives.. The advantage is that the sales person can understand the needs a nd wants .80. Tree boards: These are painted boards of about two square feet in dimension having the pictur e or name or slogan of the product painted on it.

The person carries with him literature in local language and al so samples of products. Opinion leader is a person who is consi dered to be knowledgeable and is consulted by others and his advice is normally followed. Group meeting: Group meetings of rural customers as well as prospects are an important part of interpersonal media.of the rural customer by directly discussing with him and answer his queries on products and services. The person does not sell the product but only promotes the use of the product. Su ch opinion . Such meetings could be organized in prosperous villages for promo ting consumer durables and two wheelers also. get the village people in a common place and explain the var ious schemes to the villagers. Potential customers in the village are identified and the company s/distributor s representative makes farm-to-farm visits and highlight the b enefits of the products. The dealer clarifies the terms and conditions of sale and also makes independent fol low up visits for securing orders. The bankers v isit an identified village. Example: This approach has been found to be very effective for agricultural machinery. . animal health products and agricultural inputs. Many LIC agents and companies dealing with high value consumer durables have tried this method w ith success in rich rural areas. Group meeting of key customers are co nducted by banks. Very often the local dealer also joins the representative in making farm-to-farm visits. Example: MRF Tyres conduct tractor owners meet i n villages to discuss repairs and maintenance of tractors. Opinion leaders: Villagers place more emphasis on the experience of others who have used a product/brand to make purchase decision. The company is able to pass on the message regarding benefits of the prod ucts to a large number of customers through such meetings. . agricultural inputs and machinery companies in rural areas.

the ha at can be an ideal platform for advertising and selling of goods. Handcarts have been deployed for increa sing access. Folk dances: These are well-appreciated form of entertainment available to the village people . beliefs and perceptions of rural customers that influence his buying behaviour. The Melas: Melas are of different types i. N ext day they move to another haat. e xtension workers etc. The reason being that in villages the wages are paid on weekly basis and haat is conducted on the day when the villages get their wages. bank official. panchayath-president. The folk dance Kuravan Kurathi is popular in Tamil Nadu. teachers. b) The mahakumbh at Allahabad is the biggest mela in India. For the marketer. both the sellers and buyers meet in the v illage to buy and sell goods and services. Examples: a) Mahindra Tractors use bankers as opinion leaders for their pro duct. As soon as the . By participating in haats a nd melas. These are the haats that are being held regularly in al l rural areas. drummers and musicians and they move in a well-decorated van from one village to another village singing and dancing. The troupe consists of dancers. HLL has put u p 14 stalls in the mela grounds for promoting Lifebuoy. b) Asian Paints promoted its Utsav brand of paint by painting the village Sarpanch s house a few months prior to the launch if the branch to demonstrate that the paint does not peel of f. . cattle fairs and religious fa irs and may be held only for a day or may extend over a week. In a day the troupe covers about 8-10 villages. . Many companies have come out with crea tive ideas for participating in such melas.e.leaders could be big landlords. The sellers arrive in the morning in the haat and remain till late in the evening. the company can not only promote and sell the products but also understand the share d values. commodity fairs. . The Haats: Traditionally on certain days of week. Examples: a) Britannia promotes Tiger Brand Bis cuits through melas.

about the products are answered by the sales person. This is followed by folk dances. film songs are played to attract the attention of the vil lages. Audio Visual Publicity Vans (AVP Vans): AV unit is one of the effective tools for rural communication. the folk dance progr amme of Maharashtra and over 30 programmes have been arranged in selected rural markets. After the dance programme. Mike announcement is made about the company s products an d leaflets are distributed. The sal es person makes a brief talk about situation in the village. he distributes handbills and answers queries of the customers. if any. The ad film is screened along with some popular film shots and this continues for about 30 minutes. Thumps Up has sponsored Lavnis. Colgate. . the products and the benefits. The vans move to the next v illage for the second show. . queries. At t he end of the film show. Example: Companies such as HLL. Examples: Fertilizer and pesticide companies organize folk dance programmes duri ng peak season in selected markets.5000 per day a nd therefore these programmes are conducted during the peak season in selected vill ages. The wh ole operation takes about 1-2 hours depending upon the products under promotion. Folk dance programme costs about Rs.4000 per day and AVP van operation has to be considered as an investment for business development in rural areas. The cost of running a fully equipped AVP unit is about Rs.van reaches a village. number of par ticipants in the meeting and time taken for question and answers. The van is a mobi le promotion station having facilities for screening films slides and mike publicity. and Phillips have made effective use of AVP vans for popularizing their products in rural areas.

Product display contests: Package is an integral part of the product.. Its main purpose is to protect the p roduct during transit. Field demonstration: This is based on the extension principle seeing is believing and is one of the mos t effective methods to show the superiority of the company s products to the customers. to preserve the quality and to avoid any loss in quality and quantity. The representative receives 1% commission for every customer who approaches the dealer via demonstrations. A wellplanned product display contest not only increases the involvement of dealers in the company s products but also increases the sales during the contest period. soaps and toothpaste. The farmers observe the resul ts in the field and the local dealer calls on them in their farms and persuades them to buy the particular brand of pesticide or fertilizer. c) Hawkins pressure cooker has demonstration representatives who carry out demos in rural h ouseholds. vacc um cleaners and mosquito coils could be promoted by demonstrations in selected markets. The main purpose of this contest is to remind the customer to buy the product as soon as he enter s the shop. Field days: . pressure cookers. Examples: a) Spraying a particular brand of an insec ticide against insect pests and showing the farmer how effectively the insects are controlled. e) Similarly effectiveness of detergents. The display contest has to be announced well in advance an d promotional materials to be distributed to all the selected dealers in a geographical area. b) Demonstrating the use of tractor/implements for different agricultural operation s. Another objective is to influence the dealer to stock the product and support th e company in increasing the sales. A prog ressive farmer who is an opinion leader is selected and the demonstration is conducted i n his field in the presence of a group of farmers in the village. This is used fo r promoting consumer goods such as shampoos. the contest lasts for about a mo nth. . . Prizes for best displays are announced to motivate the dealers.

These are extension of field demonstrations. management and control of pests and diseases. pesticides. Example: Hero Honda has opened extension counters with show room faciliti es in major rural markets. religious events. Examples: Textile mills maintaining community gardens. Field demonstrations/field days consume lot of time and efforts an d therefore have to be planned well. Information centers: They provide latest information on cultivation of crops. Mineral water companies s upplying clean drinking water during summer festivals in villages and Consumer goods comp anies sponsoring Kabaddi. Just before harvest. weed. Choosing media vehicles . . fertilizer application. prominent personalities and role models. fertilizers. diesel engines. are applied after making field observations. nutri ents etc. . They also pr ovide information on farm implements.e. Experienced agricultural graduates who make frequent visits to the field and advice farmers on modern agricultural practices manage the centers. Many consumer goods companies have opened show rooms in prosperous rural areas. seeds. The company organizes demonstra tions in a piece of land belonging to progressive farmers. sprayers and tractors etc. One of the main objectives of follo wing modern agricultural practices is to increase the yield. Life-style marketing: Each rural market segment has certain special features i. They include village sports. they share common li fe-style traits. pesticides. All the fertilizers. all the important farmers are invited to see demonstration plot and see for themselves how the yields are better in the plot compared to other fields.

This categorization can help the marketer to make a decision about which type of medi a would be more suitable to the product & the organization.The choice of different media vehicles for any market is based on an analysis of the standard features like: reach. cost & availability. (a) High reach High frequency · Jeep based advertising · Wall painting · Bus stand & bus panels · Haats · Hoardings · Postal branding (b) Low reach High frequency · Co-operative notice board · Shop front painting · Tin plating house · Dealer boards · Village boards · Well tiles · Calendars/labels (c) High reach Low frequency · Van based advertising · Melas · Direct to home · Folklore group · Exhibitions/created events (d) Low reach Low frequency · Tin painting tree/shops · Leaflets · Posters & banners . frequency. Depending on the factor of reach & frequency. the different media can be classified into the following categories.

· Streamers · Danglers Conclusion .

The income level of rural consumers is not as high as the income level of urban consumers that s why they want low price goods.Thus looking at the challenges and the opportunities which rural markets offer t o the marketers it can be said that the future is very promising for those who can understand th e dynamics of rural markets and exploit them to their best advantage.thehindubusinessline.htm 2. easy to use and cheaper.com/nic/073/index. Rural market has an untapped potential like rain but it is different from the ur ban market so it requires the different marketing strategies and marketer has to meet the challen ges to be successful in rural market. Application of 4A* is also a major task for the major companies in this area. but at the same time the market size is much large in the rural area. References 1. The companies can reduce their prices by cutting the costs on the packaging because the rural consumers don t need attractive packaging. The rural market is very large in compare to the urban market as well as it is m ore challenging market. The consumer wants those products which are long lasting.com/know/mktg/ . A radical change in atti tudes of marketers towards the vibrant and burgeoning rural markets is called for.coolavenues. It is necessary for all the major companies to provide those products which are easy to available and affordable to the consumers. It is one of the reasons that the sell of sachet is much larger in the rural area in all segments. so the y can successfully impress on the 230 million rural consumers spread over approximatel y six hundred thousand villages in rural India. www. good. It is right that the profit margin is very low in the FMCG products. www.

html 5.html 4.com/Faculty_Column/FC658/fc658.icmrindia.htm . www.indianmba.com/rural-economy/state-development/marketing.mapsofindia.org/casestudies/catalogue/Marketing/MKTG081.3. www. business.

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